RP telcos accuse AT&T of acting in bad faith

Philippine telecommunications companies accused US carrier AT&T yesterday of acting in bad faith after the latter raised its rates for calls from the US to the Philippines but refused to increase the share of Philippine carriers in the profits from such calls.

The STAR learned that AT&T is set to charge higher rates for calls from the US to the Philippines to reflect increased Philippine charges to it.

This, despite the fact that AT&T continues to oppose the higher Philippine termination charges, which according to local telcos does not have to translate to higher call rates since AT&T can just get it from its huge profits.

US calls to the Philippines cost between 21 cents to as much as 40 cents a minute. Of this, the US carrier pays the Philippine carrier between 8.5 to 9 cents a minute as termination charge while the rest of the call rate goes to to the US carrier. Philippine telcos, however, increased this rate to 12 cents for calls to landlines and 16 cents for calls to mobile phones effective last Feb. 1.

"So while AT&T is bullying Philippine carriers to lower their termination charges, AT&T at the same time intends to charge higher termination costs to its customers. Philippine carriers should be protected against this predatory behavior of AT&T," a Philippine telco top official told The STAR.

For his part, Philippine Long Distance Telephone Co. (PLDT) spokesman Menardo Jimenez Jr. said: "The scenario is getting clearer everyday, AT&T is just taking us, the other telcos, the Philippine National Telecommunications Commission and the US Federal Communications Commission for a ride, While they force us to accept their unreasonable rates and lobby the US FCC to pressure us, they in turn collect huge fees from Filipinos in the US," Jimenez said.

AT&T and WorldCom filed separate petitions with the US FCC last month accusing several Philippine carriers of unfair practices when the latter increased the rates they charge foreign carriers for calls entering or terminating in Philippine networks.

The two US carriers asked the FCC to reject the increased rates and in the meantime order all American carriers to stop all payments to Philippine carriers.

Named as respondents in the petition filed by AT&T were PLDT, and its subsidiaries Smart Communications and Subic Telecom, Globe Telecom, Digital Telecommunications Phils. Inc. (Digitel), and Bayan Telecommunications (Bayantel).

However, just recently, PLDT revealed that WorldCom has already entered into an interim agreement with PLDT and Smart and has expressed willingness to talk about increased rates. Similar agreements are expected to be entered into with other Philippine telcos.

Philippine carriers said every indication points to the probability that WorldCom will withdraw its petition with the FCC.

However, AT&T in a recent statement said WorldCom will continue to pursue its complaint against PLDT and other local telcos.

Meanwhile, PLDT charged AT&T of possible collusion with another US carrier MCI WorldCom after AT&T said WorldCom will not pull out its complaint against Philippine carriers.

PLDT’s Jimenez said it was a legal blunder for AT&T to speak for and on behalf of WorldCom since it points to collusion, which the FCC discourages.

"AT&T recently spoke for and on behalf of MCI WorldCom and claimed MCI will not pull out its complaint. Are they in collusion which is against FCC regulations? Did MCI allow AT&T to speak for them? Or was it a desperate move on AT&T’s part since they are now all alone in trying to reduce our reasonable rates," Jimenez pointed out.

The STAR reported last Saturday that AT&T has no intentions of ever agreeing to an increase in rates with Philippine telephone companies.